Which of the Following Risk-Free, Zero-Coupon Bonds Could Be Bought

question 7

Multiple Choice

Which of the following risk-free, zero-coupon bonds could be bought for the lowest price?

• A) one with a face value of $1,000, a YTM of 4.8%, and 5 years to maturity
• B) one with a face value of $1,000, a YTM of 3.2%, and 8 years to maturity
• C) one with a face value of $1,000, a YTM of 6.8%, and 10 years to maturity
• D) one with a face value of $1,000, a YTM of 5.9%, and 20 years to maturity